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Department of Commerce
August 13, 1999

The Department believes strongly that the American people can continue to receive the same information they have today if we close down NTIS and ensure that Government agencies post all technical reports on the Internet and send the documents electronically to the Library of Congress. This way, the American people can find the documents they want via search engines that currently exist -- and the more powerful ones being created -- and download them for free. We will propose legislation to Congress next month to achieve these ends. In the new economy, the NTIS business model is fundamentally flawed.

NTIS was created in 1950 to operate as a clearinghouse within the U.S. Government for the collection and dissemination of technical, scientific, and engineering information of all kinds. However, the rapid growth of the Internet has fundamentally changed the way NTIS' customers acquire and use information. As the Department's Inspector General noted in March 1999, "Federal agencies are increasingly bypassing NTIS as a distribution channel, instead offering their publications directly to the public over the Internet." On the Department of Commerce's own web page, the American people can get technical and business reports for free that they are forced to pay for to obtain them from NTIS. For example,

• In June 1999, the Commerce Department released the Emerging Digital Economy II report. This report can be downloaded from the Department's web page for free. Alternatively, a taxpayer can go to the NTIS web page and obtain the report for $27 per copy.
• In November 1998, the Administration released the first annual report of the U.S. Government working group on electronic commerce. This report can be downloaded from the Department's web page for free. NTIS sells this same document for $25.50. As a result,
• Sales of publications from the NTIS clearinghouse declined from almost 2.3 million units in FY1993 to 1.3 million units in FY1998.
• NTIS has used a majority of its retained earnings over the past several years to cover losses in business; in fact, the core clearinghouse business has not operated at a profit since 1993. The Department has asked Congress to provide a $2 million appropriation for FY2000 to fill the gap between costs and revenues. However, neither the House nor the Senate appropriations bill provides this funding. Without it, NTIS is in danger of being deficient in FY2000.
• NTIS' financial situation continues to worsen. For example, at the end of FY1998, NTIS forecasted revenues of $46.8 million for FY1999; ten months later, it forecast revenues of approximately $33 million -- a nearly 30-percent difference.
• To offset losses, NTIS has ventured into other businesses. But, as the Department's IG stated, "We are also concerned that in order to replace lost sales, NTIS is seeking business opportunities on the perimeter of its statutory mission, where it risks competing against private businesses."

The Department's Proposed Plan Will Ensure that the American People Continue to Have Access to Scientific Information.

In the 21st century, the Administration envisions an environment where all citizens have free access to Government information over the Internet. Improvements in technology are enabling all Federal Government agencies to post their technical reports and business information on their web-sites and allow them to maintain that information for long periods of time. Thus, the Department proposes the following two actions:

1. Transfer NTIS Archives to the Library of Congress. The Library of Congress already includes a designated scientific and technical section, and the NTIS collection of three million titles is nearly the size of Library holdings in the science and technology area. If approved by Congress, NTIS' paper, microfiche, and digital archives, and bibliographic database would be transferred to the Library of Congress in order to maintain them and ensure they remain available to the public. The Department's IG recognized that NTIS may need to be transferred to another agency and suggested consideration of the Library of Congress. In addition, current and future Government technical reports would be electronically transmitted to the Library of Congress, where they would be catalogued, indexed, and electronically archived. The Department has recently contacted the Library of Congress with our proposal, and intends to work closely with the Library in the weeks ahead to refine it.

2. Ensure that Agencies Maintain Technical Reports and Business Information on their Web-Sites for Long Periods of Time. The Department is also working to ensure that Government agencies post their technical and business reports on the Internet for long periods of time. Since the marginal cost of producing a paper copy of a technical report can be high and the marginal cost of an additional digital copy of the report is essentially zero, the Government will be able to provide the American people technical reports for free, instead of charging a fee. Moreover, a number of search engines of Government web-sites already exist (within Government entities [e.g., the Library of Congress], universities, and private sector firms). And more powerful search engines - an electronic clearinghouse -- continue to be developed within the Government so that the American people can more easily find reports they want.

Minimizing the Impact on NTIS' Employees.

If Congress approves the Secretary's proposal, the Department will take every available action to help NTIS' employees move into other jobs within the Government.

• First, the Secretary has "committed the Department of Commerce to making every reasonable effort to place [the NTIS employees in other jobs within the Department]." He has sent a memorandum to all of the Department's bureaus instructing them that, if Congress approves the Department's proposal, they are to work with the Department's Human Resources office to place employees in jobs consistent with their abilities, and when necessary, restructure open positions in order to place as many of the NTIS staff as possible. Over the past month, over 40 NTIS employees were successfully moved to other bureaus within the Department in order to keep NTIS from becoming deficient in FY1999. The Department believes that with sufficient time we can place nearly all of the employees in other jobs within the Department.
• Second, because the Department may be unable to place all the NTIS employees in jobs within the Department, the Secretary has sent a letter to OPM Director Janice Lachance asking for her assistance, if Congress approves closing NTIS, in placing and retraining NTIS employees for other jobs throughout the Government.

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